February 24, 2022
Industry Challenge
10 Developing Risks to Keep an Eye on
What: With the ongoing pandemic, growing climate challenges, and difficult insurance market conditions, we’re in the middle of a transformative time for insurance risk. Here are 10 risk areas worth watching in 2022:
- Cyber – growing payout numbers, crime innovations
- Political Risk – global supply chain instability, social media-driven unrest
- Telemedicine – cyber risks, medical malpractice
- Product Liability – lifted medical regulations now being re-implemented
- Mobility and Transport – supply chain disruption, tech company regulation
- Entertainment – labor shortages, event cancellations
- Commercial Real Estate – higher-than-expected settlements, growing crime
- Management Liability – surging SPAC litigation, regulatory scrutiny
- Employer Liability – rising premium prices, Covid vaccine-related lawsuits
- Nonprofits – growing insurance premiums, labor shortages
Why it matters: It’s important to stay up-to-date on emerging risks. It will be interesting to see how many of these trends are permanent vs temporary. Product Liability, for example, is a problem that is intensifying because Covid era regulations were lifted to enable faster production of incubators. Because those regulations are coming back into force, those companies need to confront them.
Industry Challenge
Renewable Energy Insurance
What: Due to regulations, social pressure, and government stimulus, renewable energy in the US is experiencing explosive growth. Just 18 months ago, insuring wind and solar was largely handled by just a few MGAs, but the expected growth is challenging the established insurers’ capacity.
Why it matters: It will be interesting to see whether this risk management spreads to more carriers or if reinsurers will step in to fill the gap. As the exposure becomes larger, we are anticipating that carriers will use old fashioned exposure analysis to understand the risk, price it, and mitigate it.
Read: Navigating the new and complex realm of renewable energy insurance
Industry Challenge
Canadian Insurance Companies are Trying to Standardize Insurance APIs
What: API standardization is a major challenge for insurance globally. In Canada, the Centre for Study of Insurance Operations released an API development roadmap that seeks to address this challenge. If adopted, it would reduce the friction of data exchanges among brokers, insurers and vendors.
Why it matters: This has been tried many times by everyone from Acord to Ivans to a host of other companies. It is the holy grail for the industry, but faces massive challenges in adoption, understanding, and flexibility. A better approach may be to focus on really good developer-friendly APIs that are well documented and easy to use.
Read: Next steps for industry API standardization are revealed | Insurance Business Canada
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